Two major real estate issues in the news

There were two fairly major national housing market issues mentioned last week. One was former MP, turned author and blogger, Garth Turner accusing the Canadian Real Estate Association (CREA) of inflating the reporting of national MLS® housing statistics. His accusation was based on some real estate boards in regions, such as Toronto and surrounding GTA municipalities, allowing the same listings to be posted on a few local MLS® services on  
As CREA’s chief economist Gregory Klump correctly pointed out on BNN and CBC’s Lang and O’Leary business show, while the same property may be listed more than once in a few regions of the country, the sale is recorded only once on the systems in place in these areas.  He said if you add up where there is more than one local MLS® with the same property listed, it represents only 0.8 per cent of the entire active listings, so statistically speaking it is insignificant.  
Klump said people need to understand that is a website promoting MLS® listings across the country, not an MLS® database which CREA uses to report MLS® statistics. As WinnipegREALTORS® runs and administers the MLS® for the entire province of Manitoba, including its own market region which extends out well beyond the city of Winnipeg, there is no double counting of listings based on multiple MLS® services in the same market region. There may be rare circumstances where the same address is listed twice, but the sale of the property is only recorded once.
Canadians can be assured that CREA takes great pride and due diligence in ensuring the accuracy and reliability of its MLS® statistical reporting. CREA is fully aware of the importance of MLS® statistics as an important gauge about the health of the Canadian economy, and in helping Canadians understand what is going on with one of the most important investments they will ever make in their lifetime. 
“The scope for any impact on national sales data from remaining duplicate listings that may slip through    represents a fraction of a fraction of one per cent,” said Klump. “This is not statistically significant, particularly as it relates to the identification of trends. CREA maintains absolute confidence in the quality and accuracy of statistics it receives from boards and associations that are generated from MLS® and other co-operative listings systems across Canada.”
In a national story covering this issue, BMO’s chief economist, Douglas Porter, said there is a margin of error around every economic statistic, and he is confident CREA accurately captures the trends of the resale housing market in this country.
CIBC’s chief economist, Avery Shenfeld, was in Winnipeg this week to talk about the national and global economy.  When asked a question about Finance Minister Jim Flaherty’s concern over higher house prices, and whether he would intervene again as he has done in the past to try and cool the housing market down, Shenfeld gave an interesting answer that many people may lose sight of, as a result of the sensational media headlines. 
Shenfeld’s said the issue of Canadians being over indebted is overblown, as less than 0.3 per cent of Canadians are in arrears on their mortgage payments. When the U.S. had their housing market meltdown, seven per cent of Americans were in arrears. He said anyone with a pulse could get a mortgage back then, which is certainly not the case today in Canada. Our nation has a far better regulated banking system, which is felt to be one of the best in the world.
He also mentioned low interest rates are not having the same impact they once did in spurring on higher house prices, as Canadians have gotten used to them in the last few years. Shenfeld said that interest rates are still the preferable way to keep a lid on house price increases. However, that option has not been available, given the Bank of Canada’s stand not wanting to slow down the Canadian economy during a slow recovery after the recession in 2008. With inflation rates remaining under two per cent, there is no need to raise interest rates. 
An alternative was the actions Flaherty took on tightening mortgage regulations. As a result, Canadians are not able to borrow as much for a home and thus are taking on less debt. 
 Shenfeld said Flaherty will likely not do anything in the short term.  What he said Flaherty would prefer is for Canadians to still be active in purchasing homes as he understands the importance of housing purchases on the economy and the resulting spinoffs .  
The key is not to overextend yourself when purchasing a house. Does everyone need three bathrooms? asked Shenfeld. Essentially, buy a home with a mortgage you can comfortably handle, and have a cushion in place in the event interest rise in subsequent years.